Picks of the Day November 28, 2017

“Cyber War”: Amazon vs. Walmart

A lot happened yesterday but perhaps the biggest question today will be who will reign triumphant: Amazon, the online behemoth, or Walmart, the brick and mortar powerhouse? Walmart, after all, has increasingly repositioned itself as a worthy competitor to Amazon, buying up online sites, continually bolstering its supply chain to be able to eat into Amazon’s dominancy. There’s no question that Amazon is the #1 online retailer. What’s on investors’ minds is whether Walmart can leverage its vast network of stores, purchasing power, economies of scale, increasing online talent and competitive offerings to give Amazon a run for its money! And that’s what we hope to get today, some glimpse into the initial numbers from these two rivals that have faced off like gladiators in a fight to the finish!

On the political scene, things have also gotten messy. It would seem that the Republicans would have carte blanche to push through tax reform no questions asked, almost like a running back whose broken loose, not a single defensive player in sight. That could not be farther from the truth though. Beleaguered by scandal, a president under investigation for election meddling in cahoots with the Russians and a Senate divided on clear ideological lines, nothing seems to be going the Republicans’ way. While the House pushed through a tax bill, the Senate has proven more than recalcitrant. The president keeps on promising that it’s coming, it’s right around the corner, the last details just have to be stamped out, but some 9 Republican holdouts have proven hard to convince. With 52 Republican Senators pitted against 48 Democratic counterparts, the former can only afford to lose 2 votes – the Vice President, then, breaking the tie. Of the 9 abovementioned Republicans, there are 3 different blocs, each with different reasons for not tagging along with the president’s orders. With a vote expected as early as today, it’s anybody’s guess how things will play out.

Yesterday, like we wrote both this past Sunday and last Friday, the market showed seasonal weakness, the Monday after Thanksgiving historically weak. We did see intraday records on the heels of sizzling retail shares, but come the closing bell, only blue chips were able to eke out gains.

More than anything, it was the retail sector that found itself in the limelight yesterday. Black Friday sales hit an online record of $5.03 billion, Cyber Monday likewise expected now to set an online record. Amazon ended up 0.83% yesterday, making it its fourth straight record close. Both Amazon and Walmart have been on fire this year, Amazon’s CEO, Jeff Bezos, taking center stage with his net worth recently exceeding $100 billion.

On to the Fed! Robert Kaplan, Dallas Fed President, who had until recently voiced concern about a December hike, said yesterday that he’s all aboard. Kaplan, though, did underscore potential financial imbalances. In relation to the fact that the market hasn’t fallen 3% in a full year, he commented, “This is extraordinarily unusual.”

Other active stocks included Time Inc. (TIME), which soared 9.5% in heavy trading after Meredith (MDP), agreed to buy the magazine publisher for $1.85 billion. Meredith also took off, gaining 11% on the day.

It was the energy sector, though, that was the market’s Achilles heel, falling 1%, slipping in tandem with falling crude prices. OPEC will be convening later this week, investors now hoping for a production cut. The most actively traded stocks in the sector were Hess (HES, -2.93%), Marathon (MRO, -4.30%) and Chevron (CVX, -0.79%).

Bitcoin also took off, rising 3.5% to a new all-time high yesterday. The digital currency is closing in on $10,000, now trading at $9,651.90.

Index

Last

Daily change

DJX

23,580.78

+22.79

(0.10%)

SPX

2,601.42

-1.00

(-0.04%)

Nasdaq

6,878.52

-10.64

(-0.15%)

Today’s Market: The incoming Fed Chief, Jerome Powell is expected to field questions from the Senate today. Janet Yellen will be testifying to the Joint Economic Committee on Wednesday.

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